Updated Aug 7 at 7:04pm ET.
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Lyft reported a strong second quarter with revenue of $1.84 billion, slightly ahead of what analysts expected. The most important figure was the number of active riders, which hit a record 30 million. This growth suggests the company is successfully keeping its 25 to 30 percent share of the market even while competing with much larger rivals.
The business is also becoming a more reliable cash generator, bringing in over $1 billion in cash from its operations over the last twelve months. While the company expects growth in gross bookings, the total dollar value of all rides, to slow slightly to between 15 and 19 percent next quarter, the overall trend shows a business that has moved past its survival phase and is now focused on steady, profitable growth.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Lyft is set to share its second quarter results this afternoon. Analysts expect the company to report about 1.81 billion dollars in revenue. Beyond the headline numbers, we are watching for growth in active riders and gross bookings, which is the total dollar value of all rides before the company takes its cut.
These metrics show whether the company is holding its ground against Uber. We are also looking for updates on high-margin revenue from in-app ads and whether the company is successfully managing its insurance costs, which are the biggest expenses that eat into its profits.
Baidu is now testing autonomous vehicles in London as part of its work with Lyft and Freenow, a European ride-hailing app that Lyft owns. This move signals that the company is preparing for a future where robotaxis could handle some of its ride volume.
While commercial use is still in the testing phase, these partnerships are important for the long term. If the company can successfully integrate self-driving cars into its network, it could eventually lower its reliance on human drivers and reduce the high costs of driver incentives and insurance.
Ben Minicucci, who leads Alaska Air Group, joined the board of directors in late July. He brings experience running a large, complex transportation business with high fixed costs and strict safety requirements.
This addition follows the recent appointment of a safety and policy expert earlier this year. As the company tries to move from a struggling startup to a mature, profitable business, adding directors with experience in traditional transportation and safety regulation is a logical step.
Source: 8-K filing
A federal judge blocked a New York City law that would have required the company to give drivers notice before removing them from the app. The court found the law unconstitutional, which preserves the company's ability to manage its driver pool without new local restrictions.
This is a win for the company's operating flexibility. Being able to quickly remove drivers for safety or performance reasons is essential for maintaining the quality of the network and managing legal risks.
Source: Reuters
Analysts recently adjusted their price targets following the company's latest earnings report. Most experts are cautious, with 22 of 59 analysts rating the stock a buy, and the average target of $18 suggests only 4% upside from today's price.
Lyft has a mixed record of meeting analyst targets, but its underlying growth in riders and bookings has remained remarkably steady over the last two years.
